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Microsoft buys Skype for 8.5 Billion

3 minute read

Microsoft has purchased Skype for an incredible 8.5 billion (thats around $36 Australian Dollars) in a deal most believe is to alleviate the threat from Google’s limited but excellent Google Voice software. The company was last purchased for 2.7 billion, so this is not a bad return on the investment, although Skype still continues to lose money on revenue of over 800 million. This will net Microsoft around 170 million active Skype users worldwide.

I use Skype regularly and it has become a replacement for the home phone (and business phone) for me and my team.

Skype to me is a great success story and its business model is perfect for exponential growth – getting users to reach out to all of their friends to become members and contacts and saving everyone time and money to connect from almost any location.

Skype also reaches out on just about any platform including Mac, iPhone, Android, BlackBerry and the like, even set top boxes and DVD players and some televisions.

Yes, this is a big price and Skype does compete with a few of Microsofts products such as Windows Live Messenger, but very few people use this software for making calls.

The Skype software is continually evolving with group conferencing and other additional features, you can call anyone, create group chats, share screens and with add ons even record calls. Skype still has a way to go to be the perfect solution for larger businesses, but all in all I think it is a good deal that only the likes of large unwieldy companies like Microsoft could screw up. (Telstra could too, but thats a whole other story)

What will this mean for the current Skype users and software? I doubt Microsoft would be foolish to make any large changes immediately, they could expand the API for users to connect to other services and could also create advanced screen capturing for giving demos or lessons and publishing those on the web, much like Screenr.com

If Microsoft continue to integrate, innovate and grow the software it could mean the end for many a fixed line Telco worldwide. Microsoft will no doubt expand its integration into many of its products including office but the deal to me is all about stopping Google.

Google Voice
Google Voice operates in the US only at this stage, but this deal should see Google get off its backside and introduce other countries and to Australia and New Zealand sooner rather than later.

With Google Voice you simply create a new phone number and match it with your Mobile Phone number (from a large range of providers). All calls are routed to your existing mobile phone.

The power of Google Voice lies in its messaging and translation. If you miss the call it then translates the voice message into text and SMS’s and/or emails you the translated text, you can also play the message from your phone or through a browser on your connected device/desktop.

The transcription is not always accurate, but you get the gist of most messages by just the reading the translated text.

In the US I use Google Voice for all of my SMS messaging and it plays beautifully with Email, SMS, Browsers and is supported on all iPhone, iPad and Android Devices.

All in all a good fit and smart move by Microsoft, let’s just see if they stuff it up!

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7 Comments

  • Matt Healy
    Posted May 12, 2011 at 9:35 am 0Likes

    around $36 Australian Dollars – wow what happened to the exchange rate?

  • Ryan O'Grady
    Ryan O'Grady
    Posted May 12, 2011 at 9:57 am 0Likes

    From what i read there is mixed views in relation to this purchase.

    Some commentators say that the purchase was because Microsoft are struggling against facebook & Google and as a result needed to purchase Skype before either of them did.

    Others say the purchase of Skype will compliment Microsoft

  • Nick
    Posted May 12, 2011 at 10:33 am 0Likes

    My bets are they will drive Skype in to the ground. The core reason for Skype’s success is its lack of crap – its nice a simple and does one thing very well, which Microsoft will be busy rectifying as we speak.

    Plus there are concerns about the end of the world because of this buyout: http://img.imgur.com/yvtdc.png

  • Peter Ricci
    Posted May 12, 2011 at 12:43 pm 0Likes

    Matt, i think you might gather I was being a little tongue in cheek there. Nick, seriously it would be very hard to do that, but big companies like this have a way of screwing things up 🙂

  • Bill Burdin
    Posted May 12, 2011 at 2:35 pm 0Likes

    “If Microsoft continue to integrate, innovate and grow the software it could mean the end for many a fixed line Telco worldwide.”

    I think you are spot on and they don’t need to change the model much. Just strengthen the brand, I suggest their aim should be to get Skype into the dictionary, so instead of “I’ll call you” it’s “I’ll skype you” that would be the day they could say “we won”.

    I’m just waiting for Julia to hook me up to her NBN and I’ll kiss Optus and Telstra goodbye, Skype will service my needs very nicely thank you.

  • Bill Burdin
    Posted May 12, 2011 at 2:36 pm 0Likes

    Hey Nick, I love it 🙂

  • Vic
    Posted May 13, 2011 at 9:06 am 0Likes

    There has been amazing publicity on this buy out. I wouldn’t be surprised if Skype membership goes through the roof on the publicity itself.

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